Update on Five Year Plan - Almarai › wp-content › uploads › 2018 › 01 › ...Sales Analysis...

Almarai Company

2013 Q2 Earnings Presentation

Disclaimer

Information contained in this presentation is subject to change without further notice, its accuracy is not guaranteed and it may not contain all material information concerning the company. Neither we nor our advisors make any representation regarding, and assume no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, to any information contained herein. In addition, the information contains projections and forward-looking statements that reflect the company’s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the company’s assumptions are correct. Actual results may differ materially from those projected. This presentation is strictly not to be distributed without the explicit consent of Almarai Company management under any circumstances.

Almarai Company 2 2013 Q2 Earnings Presentation

Business Highlights

Revenue of 5.3B SAR, growth of 15.8% driven by poultry 70%, juice 24%, Bakery 15% and inclusion of IDJ results.

Revenue growth of 11.5% in KSA, 9.5% in all other GCC states and 105.5% in rest of the world including Jordan and Egypt, driven by first time consolidation of IDJ in Q2, 2012.

EBIT of 785 million SAR grew by 7.9% over YTD Q2, 2012. Whilst margin over material are now growing at a higher growth rate than revenue growth, higher labour overheads, higher depreciation and inclusion of IDJ overheads have resulted in lower EBIT growth.

Net operating cash flow of 1.0 B SAR is 2% behind last year. Whilst operating cashflow prior to working capital were 1.4B SAR, working capital expansion to prepare for the holy month of Ramadan accounted for nearly 400M SAR of additional cash requirement.

Capital expenditure for the first half was 1.5B SAR, 13% lower than first half last year. Our capex spend profile remain in line with our earlier forecast of 3.1B capex spend for the full year 2013.

Staff strength stood at close to 31K at end of Q2, 2013. Growth in headcount accounted for part of the increase in overhead growth, including higher statutory charges, which is running in line with capacity expansion but is growing faster than volume and revenue growth. Within KSA, Almarai ranking still stands at the high end of green band in Nitaqat.

Other major highlight includes roll out of second line of poultry plant and managing business growth in Egypt amid difficult trading conditions.

Highlights – 1st Half 2013


SAR ' MGrowth over last

yearSAR ' M

Growth over last

year

Group Revenue 2,873.9 13.9% 5,284.9 15.8%

Net Income 398.2 4.9% 653.3 5.1%

Q2 2013 1st Half 2013

Strong pipeline of innovation continues in 2013

5 2013 Q2 Earnings Presentation Almarai Company

Sales Highlights

Sales Growth – Geography mix


KSA

All

Others

GCC

11.5%

9.5%

105.5%

Almarai

Group 15.8%

% Growth

1st half 2012

Rev in B SAR

1st half 2013

Rev in B SAR

KSA65.5%

GCC25.4%

All Others9.1%

1st half 2013

KSA68.0%

GCC26.9%

All Others

5.1%

1st Half 2012

0.23

0.48

1.23

1.34

3.10

3.46

4.56

5.28

Sales Analysis by Product & Region


Sales by Product

Participation vs Growth – 1st Half 2013

2013 2012 % change

Fresh Dairy 2,100.0 1,836.4 14.4%

Long-Life Dairy 520.2 476.9 9.1%

Fruit Juice 672.7 542.8 23.9%

Cheese & Butter 807.3 782.8 3.1%

Bakery 710.4 618.5 14.9%

Poultry 364.8 214.5 70.1%

Arable and Horticulture 98.4 64.3 53.0%

Other Sales 11.2 28.3 (60.5%)

Tota l Sa les 5,284.9 4,564.5 15.8%

Sales by Product

Group SAR Million

1st Half

39.7%

15.3%

13.4%

12.7%

9.8%

6.9%

14.4%

3.1%

14.9%

23.9%

9.1%

70.1%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Fresh Dairy

Cheese & Butter

Bakery

Fruit Juice

Long-Life Dairy

Poultry

Participation 1st Half 2013 Growth 1st Half 2013 v 1st Half 2012)

40% 30% 20% 10% 0% 10% 20% 30% 40% 50%

KSA65.5%

Kuwait4.9%

Qatar4.2%

Bahrain2.1%

UAE9.1%

Oman5.1%

Egypt4.3%

Jordan2.4%

Export / Others2.4%

Sales by Country - 1st half 2013

Change in growth rates and IDJ consolidation results in higher

share of poultry, Juice and Long life dairy


39.6% 40.7% 43.4% 40.3% 39.6% 39.9%

19.4% 15.4%15.3%

15.5% 16.4% 14.4%

14.4%12.9%

11.3% 14.0% 14.1%12.9%

10.2%13.3% 13.8% 12.5% 11.9%

13.4%

10.5% 10.4% 9.4% 10.9% 10.7%9.1%

4.7% 4.7% 4.8% 6.1% 6.7%7.1%

1.3% 2.6% 2.0% 0.7% 0.5%3.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

Revenue Contribution

Other Sales

Poultry

Long-Life Dairy

Fruit Juice

Bakery

Cheese & Butter

Fresh Dairy

Product mix in different geographical regions highlights

revenues growth potential….

Almarai Company 10

Fresh Dairy40%

Long-Life Dairy10%

Fruit Juice13%

Cheese & Butter

15%Bakery

13%

Poultry7%

Arable and Horti2%

Other Sales

0%

Total

Fresh Dairy38%

Long-Life Dairy

7%

Fruit Juice11%

Cheese & Butter

16%

Bakery17%

Poultry10%

Arable and Horti

1%

Other Sales0%

KSA

Fresh Dairy49%

Long-Life Dairy12%

Fruit Juice14%

Cheese & Butter

15%

Bakery8%

Poultry2%

Other Sales0%

Gulf

Fresh Dairy24%

Long-Life Dairy25%

Fruit Juice26%

Cheese & Butter

13%

Bakery1%

Arable and Horti11%

Other Sales0%

All Other Countries

`

..which can be achieved via expanding presence of Almarai

Operations throughout the region


Distribution

centre

Manufacturi

ng facility

Tabarjal

Aflaj (Laila)

Junoob

New Depots

in 2013

Statement of Income

Statement of Income


• GCC Margin over material has continued to show higher growth than revenue in H1 2013. However, higher depreciation, IDJ consolidation effect in Q1 2013 and higher headcount to manage poultry roll out resulted in lower gross profit growth compared to revenue growth.

• Similarly, growth in overheads is driven by head count increase and IDJ consolidation in Q1, resulting in lower net profit growth relative to revenue growth

SAR million 2013 2012 Change 2013 2012 Change

Net Sales 2,873.9 2,524.1 13.9% 5,284.9 4,564.5 15.8%

Cost of sales (1,839.4) (1,602.4) 14.8% (3,422.6) (2,935.5) 16.6%

Gross Profit 1,034.5 921.7 12.2% 1,862.3 1,629.0 14.3%

Selling and Distribution Expenses (457.4) (403.4) 13.4% (907.5) (748.1) 21.3%

General and Administration Expenses (93.1) (83.7) 11.2% (170.0) (153.9) 10.5%

EBIT 484.0 434.6 11.4% 784.8 727.0 7.9%

Share of Results of Associates (15.8) (5.4) 193.2% (21.8) (17.7) 23.1%

Bank Charges (58.1) (42.3) 37.5% (96.9) (69.7) 39.1%

Income from Main and Continuing

Operations410.0 386.9 6.0% 666.1 639.7 4.1%

Zakat and Income Tax (12.1) (13.1) (7.7%) (19.7) (21.0) (6.2%)

Income before Non Controlling

Interest398.0 373.8 6.5% 646.5 618.7 4.5%

Non Controlling Interest 0.3 5.7 n.a 6.9 2.9 134.0%

Net Income 398.2 379.5 4.9% 653.3 621.6 5.1%

Earnings Per Share 1.00 0.96 1.64 1.56

Net Income % 13.9% 15.0% 12.4% 13.6%

YOY Change in Net Income (1.2%) (2.3%) (1.3%) (1.9%)

2nd Quarter 1st Half

Segment Reporting


SAR Mi l l ionDairy &

JuiceBakery Poultry

Arable and

Horticulture

Other

Activi ties

Almarai

Consol idated

1st Hal f 2013

Sales 4,123.4 710.4 364.8 200.7 0.9 5,400.1

Third Party Sales 4,110.4 710.4 364.8 98.4 0.9 5,284.9

Depreciation (463.7) (63.4) (60.9) (35.8) (7.6) (631.5)

Income / (loss) before Non

Controlling Interest663.0 110.4 (137.1) 45.7 (35.5) 646.5

Total Assets 11,735.7 2,055.9 4,431.3 1,829.0 1,036.5 21,088.4

Total Liabilities (5,153.3) (1,722.1) (4,549.4) (247.8) (1,140.8) (12,813.4)

Return on Sales 16.1% 15.5% (37.6%) 46.4% n.a. 12.2%

Growth versus 1st Half 2013

- Third Party Sales 12.1% 14.9% 70.1% 53.0% n.a. 15.8%

- Income / (loss) before Non

Controlling Interest12.5% 35.4% 202.0% 263.8% 81.7% 4.5%

Q2 2013

Sales 2,219.8 369.5 202.7 176.2 0.9 2,969.1

Third Party Sales 2,209.3 369.5 202.7 91.5 0.9 2,873.9

Depreciation (323.6) (31.8) (45.0) (18.2) (4.0) (422.5)

Income / (loss) before Non

Controlling Interest412.6 76.1 (91.1) 18.9 (18.6) 398.0

Return on Sales 18.7% 20.6% (44.9%) 20.7% n.a. 13.8%

Growth versus Q2 2013

- Third Party Sales 8.7% 13.7% 70.3% 88.4% n.a. 13.9%

- Income / (loss) before Non

Controlling Interest29.5% 64.3% 578.0% (41.9%) 78.8% 6.5%

Trend charts

Robust revenue growth with challenging – but

anticipated – EBITDA & EBIT trend


Revenue, EBITDA and EBIT Evolution

2,757

3,770

5,030

5,869

6,931

7,951

9,883 10,60319.4%

20.7% 21.0%21.8%

21.1%

19.1%

16.9%16.3%

25.7% 26.0%25.3%

26.7% 27.2%

25.6%

24.2%22.3%

2006 2007 2008 2009 2010 2011 2012 Last 12 months

SA

R in

Mill

ion

Revenues

EBIT %

EBITDA %

CAGR 2006 – 2013: 21.2% (w/o impact of acquisitions 18.4%)

Quarterly Performance – Net Income


90

.6

12

2.8

16

2.2

19

7.4

23

4.1

23

5.2

24

2.1

25

5.1

12

1.8

16

5.3

23

5.2

28

7.1

34

3.1

34

9.3

37

9.5

39

8.2

12

2.6

18

6.1

29

3.7

36

3.4

42

4.5

42

9.7

45

0.0

13

0.2

19

3.1

21

9.2

24

8.8

28

3.5

28

5.5

36

9.0

0

50

100

150

200

250

300

350

400

450

SA

R M

illio

n

Q2 = 4.9%

2013 versus 2012

Q1 = 5.4%

Cash Flows

Cash Flow Statement (1st Half 2013)


Higher revenue growth

resulted in positive

operating cash flow, which

was partially subdued by

working capital

expansion,….

….but additional capex

investment, especially for

poultry (0.4B) resulted in

negative free cash flow of

0.7B

417

1,019

692 1,706

1 421

0

500

1,000

1,500

2,000

2,500

Cash at

beginning of period

From

Operating Act ivities

From Financing

Act ivities

Used in

Investing Act ivities

Currency

Impact

Cash at end of

period

SA

R M

illio

nSAR Mi l l ion 2013 2012

From Operating Activities 1,019 1,040

Used in Investing Activities (1,706) (1,755)

Cashflow Av'ble for Dist'n (687) (715)

From Financing Activities 692 730

Increase/(Decrease) in Cash 5 15

Currency Translation Impact on

Cash and Cash Equivalents(1) 0

Cash at beginning of period 417 272

Cash at end of period 421 287

1st Hal f

Cash Flow Bridge – rolling 12 months


287

2,364

1,186 (2,737)

(496)

(182)421

Cash at 30 Jun 2012

Operating Cash Flow

Capex

DividendOthers

Cash at 30 Jun 2013

+ SAR 134 m

Sukuk / Loan Payments /

Others

Balance Sheet

Balance Sheet


SAR Mi l l ion 30/06/13 30/06/12

1,331 1,182

945 870

14,281 12,426

16,558 14,478

1,335 1,383

413 353

18,306 16,213

9,612 8,244

310 266

109 131

8,275 7,573

18,306 16,213

116.2% 108.9%

Net Operating Working Capital

Biological Assets

Property, Plant and Equipment

Net Operating Assets

Total Equity

Net Capital Employed

Net Debt to Equity Ratio

Intangible Assets - Goodwill

Investment & Financial Assets, Deferred

Charges and Derivatives

Net Debt

End of Service Benefits

Deferred Tax (Net)

Net Debt


1,320 2,454 3,398 3,869 4,606 6,653 8,237 9,612

70% 80%

94% 72% 74%

98% 101% 116%

1.7x 1.9x

2.3x 2.3x 2.2x

2.8x

3.1x 3.5x

0%

50%

100%

150%

200%

250%

300%

350%

400%

0

2,000

4,000

6,000

8,000

10,000

12,000

2006 2007 2008 2009 2010 2011 2012 Last 12

months

Net Debt Net Debt / Equity Ratio Net Debt / EBITDA

in m

illio

nS

AR

Debt Profile highlights balanced approach for

funding….


0.0

0.5

1.0

1.5

2.0

2.5

3.0

<1yr 1-2 yr 2-3yr 3-4 yr 4-5yr >5yr

SA

R B

illio

n

Debt Maturity by Age and Type

Islamic Bonds

Govt / Semi Govt Inst.

Banks

6.8, 68%

0.9, 9%

2.3, 23%

Capital Expenditure

Capex spend in line with Guidance…


Capex spend of 1.5B SAR, which is in line for with our earlier forecast of 3.1B SAR for the year

2013.

Poultry capex spend for the first half amounted to more than 0.4B SAR. The key highlight for the

first half was the commercial production of the first line in Q1 and second line in Q2 as previously

communicated.

Each of the three main functions of Sales,

Manufacturing and Farming consumed capex of

~0.2B SAR.

Replacement and other capex including IDJ,

accounted for another 0.2B SAR.

0%

50%

100%

150%

200%

250%

300%

Almarai TASI

Key Share Data


Key Stat ist ics for Almarai (26 June 2013)

Current P/E Rat io (ttm) 19.1

Est imated P/E(12/2013) 17.8

Earnings Per Share (SAR) (ttm) 3.6

Market Cap (M SAR) 27,798

Shares Outstanding (M) 400.0

30 Day Average Volume 596,988

Dividend Indicated Gross Yield 1.8%

Cash Dividend (SAR) 1.3

Last Dividend 4/3/2013

5 Year Dividend Growth 11.7%

Thank you

Almarai Company

Exit 7, North Circle Road

Al Izdihar District

P.O. Box 8524

Riyadh, 11492

Saudi Arabia

Contact for investor relations matters:

Khalid M. Al Nasser

+966 11 470 00 05 ext 1280

[email protected]

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Update on Five Year Plan - Almarai › wp-content › uploads › 2018 › 01 › ...Sales Analysis...

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